Incoherent And Unimaginative, Our Economic Inequality Debate Is A Waste of Time

Washington
Political theory and strategy that works for American humans

We're at it again. From the top down, starting with President Obama, we're beating anew the horse of economic inequality.

At first blush, why wouldn't we? "Economic inequality" is a phrase we use to describe the impression that financial conditions in America are polarizing, not mushing toward the middle. That doesn't just alarm middle class people. It alarms those below the midpoint, who fear facing more competition for resources, and those above the midpoint, who know that the worse this problem gets, the more they'll be expected to bear a greater burden. And in a society where just about everyone has a tiny or negative net worth, these kinds of perceived threats carry real weight.

On the other hand, there's something deeply awry with the way we argue about the policy choices surrounding economic inequality. Take the latest exchange between Tim Carney and Josh Barro on the perennial topic of libertarian populism. Josh complains that Tim asks whether economic inequality matters, but "never answers that question." But Josh himself, despite insisting that economic inequality matters, only gestures vaguely at an answer to why.

Without plunging into this question, everything that follows is a waste of time, unmoored from an actual apprehension of what is and what can be. In the absence of that kind of clarity about the correspondence between our concepts and our reality, policy becomes something to do for its own sake -- because it's impossible to imagine what else ambitious experts are for, or because raw power games have consumed our sense of political possibility.

So let's tease out some possible accounts of why economic equality matters. "The point of economic growth is that it leads to improvements in standards of living," Josh writes. "If the gains from economic growth are not broadly shared, but instead accrue disproportionately to people already at the top of the income distribution, then a lot of economic growth will only generate a little improvement in living standards for most people. For this reason, rising inequality is a problem even if it does not hold back GDP." Less important than whether this is actually true is why we should care if it is. Perhaps:

(a) meager improvement in living standards for most people will worsen the economy for everyone, making America's future unpalatable?

(b) the living standards most face in a "disproportionately unequal" economy are morally unacceptable?

(c) disappointing living standards for such a large group of people will foster an undesirable level of social and political unrest?

(d) whether or not sociopolitical unrest is in the cards, the level of resentment and depression generated by disappointing living standards will badly worsen America's culture and encourage de-civilization?

All these possibilities appeal to different foundational views about which possibilities to create through policy and which not to pursue. The first puts material goods -- money -- first. The second presumes that permitting suffering is the worst thing we can do. The third seeks public order above all. And the fourth sets the durability of our current practices as the first-rate value. (Yes, you can put on your attorney hat and claim that there is no fundamental choice, that it's okay to argue all of these things in the alternative. That might work in court, but policy is already off the rails if would-be policymakers think they will govern well simply if they "win" their "case.")

Without orienting the debate about economic inequality in these kinds of terms, critics of libertarian populism will continue to talk past advocates of an anti-crony agenda. At the same time, Carney and those like him face a similar challenge. On the face of it, there are myriad problems with cronyism: it corrupts politics, it raises hidden barriers to ambition, and it's hostile to the fortunes of individuals who do not want to be beholden, or who are not beholden, to corporate or governmental patronage and compliance networks. But arguing all these things, together or in the alternative, helps conceal the foundational view: cronyism attacks personal independence. The fundamental issue is not equality but liberty.

That's why critics like Josh complain that libertarian populism doesn't really say anything about economic inequality (which is, again, for whichever reason, the most important thing policy should speak to). The rejoinder here ought to be that liberty in the sense of personal independence is essential to greater economic inequality, because without the possibility of workable personal independence, the existence of a broad middle class becomes utterly dependent on those massive patronage and compliance networks -- which today are exclusively managed by the most economically elite power figures in America's great "public-private partnerships." And as we have seen, a patronage/compliance society defined by elite managers and huge personal and institutional debt means a vast class of citizens whose economic fortunes policy only measurably improves by transfers of cash or credit. Despite orienting its fears around economic inequality, crony civilization is hardwired for a huge base of poor and a tiny pyramid-peak of superelites. Thriving independent persons, in a pattern reaching back to the alliance between Court and People against the landed aristocracy, become the enemy -- picked at from below because they possess the net worth necessary for independence, and poached from above because the elite always needs fresh recruits.

But even this account is ultimately a diversion, because it still doesn't tell us why we should care that all these presumptively horrible things are happening. There's still another level to dig down to find the root.

And the root vision, the captivating claim, is this: a life defined by fear is not worth living. Everyone secretly knows this is what's at stake. Since liberals think that ultimately some class or another is always in charge, they're upset that a society ruled by independent persons throws everyone else into a condition of grinding fear. Since conservatives think that a public obsession with power or money will destroy freedom, they're upset that popular secularism will throw independent persons into, yep, a condition of grinding fear. Neither the liberal nor the conservative concern is wrong, per se. But both those concerns are -- yep -- fears! And since everyone secretly feels like a life defined by fear isn't worth living, both liberals and conservatives refuse to cede or change ground; doing so feels like permitting your enemy to make you afraid.

That's why the ultimate question goes unasked again and again: How does economic inequality matter, and how much, in light of the endowments we all share, in virtue of our mere humanity, that give us access to ways of defeating our fears? A policy conversation that can only conceive of defeating fear with cash or credit is a narrow one indeed -- far narrower than the scope of our sense of what being human is about. That's not to say that money isn't, as Tocqueville said, significantly more important than in times of true social hierarchy. It is to say that if we all believe money is foundational to the question of whether our life is defined by fear, we are preventing ourselves from "solving the problem" before we even pose it.